Incorrect speed readings are quite common. It's annoying but won't do no harm. As long as controller gets right temp-data, it drives fans right speed.
Thanks for the reply. Firmware is updated to the latest version and using different cgminer revisions yielded the same results. It will run all day without issue and the fans are working perfectly. I guess this S3 is just a little special!
The 0 Best Share is a long standing bug with bitmain hardware. Best share wont show up if your share difficulty is a power of 2. Change your share difficulty and it'll start working. Try 500 instead of 512.
That best share bug is corrected in Kano's version. Atleast it works with my miners. That speed thing is trickier. I think it gets incorrect data from hashboard or there's open circuit somewhere. I have exact same problem with my homemade controller and I'll have to study it further. At last I got my own controller working!